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20 Dec. 2018

New Australian Accounting Standards

The AASB has clarified the definition of a business and the definition of ‘material’ through two new amending Standards.

  • AASB 2018-6 clarifies the definition of a business in AASB 3 Business Combinations, to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition.

  • AASB 2018-7 clarifies the definition of ‘material’ and its application across AASB Standards and other pronouncements.  The principal amendments are to AASB 101 Presentation of Financial Statements.

Both Standards are effective for annual periods beginning on or after 1 January 2020. Earlier application is permitted.